US awaits the shopping trolley test

The US economy is in Judy Leonard's shopping trolley. Referring to her many discounted items, the 55-year-old factory worker from North Carolina says: "I am trying to cut back. I don't know how long my job is going to be here."

Wal-Mart Stores cares about the contents of her trolley because its sales are growing at half the rate they were a decade ago.

The US Federal Reserve and private economists use the world's largest retailer as an economic indicator, and they want to know whether American consumers are spending more as a result of President George Bush's $US330 billion ($A490 billion) tax cuts.

Mr Bush says his tax package reduces taxes for small businesses, investors, parents and other wage earners and will stimulate spending. Wal-Mart is a test of whether consumers will spend or save the tax credits that 25 million families received from July 15 to August 8.

The initial evidence is not good. Richard Yamarone, an economist at Argus Research Corp, says: "A lot of people are postponing purchases until the job market improves and job creation begins."

Wal-Mart accounts for 9 cents of every US retail dollar, with 19 million customers daily, more than any other chain. While sales at its US stores climbed 6.9 per cent in August from a year earlier, company treasurer Jay Fitzsimmons says the increase may be short-lived.